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Report Outline

Overall Report Outline
Early 21st Century, the trend towards outsourcing accelerated. True enough, with the
growing number of unemployed individuals in the Philippines, employment is deemed a privilege.
A privilege that some employers tend to exploit due to the employees’ lack of basic knowledge of
the labor law. Moreover, oblivious or not, these employees are pushed to give more than what they
receive due to their fear of being replaced and the fact that opportunities are hard to come by.
Article XIII, Section 3 of the 1987 Constitution of the Republic of the Philippines serves
as the umbrella of the labor laws state that:
“The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment
opportunities for all.
“It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations and peaceful concerted activities, including right to
strike in accordance with law. They shall be entitled to security of tenure, humane
conditions of and a living wage…”
Unfortunately, in spite of the protection provided by the laws and the Constitution, the facts
remain unchanged. The Philippines has a massive pool of low-skilled, cheap labor which indirectly
paves a path for contractualization to prosper. Consequently, workforce would be easily
replaceable which allows businesses to keep labor costs rock-bottom low. As a result, the
Philippines maintains the highest unemployment rate in all of the Asian Nations. Currently, the
country has approximately 105 million citizens. As the years go by, more and more people are
entering the job market as compared to the number of new vacancies. The law of supply and
demand dictates that, if Supply is greater than the Demand, then Prices are expected to drop. In
this case, the Manpower is greater than the available employment opportunities. Thus, workers are
forced to accept a low paying job because they believe that they are an expendable resource.
In appreciation of this, employers found an avenue to increase profits by ultimately
decreasing cost and at the same time reducing the burden of processing taxes in a legally acceptable
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manner. Subsequently, the feeling of oppression magnified which invoked reactions from the
aggrieved forming labor groups like the Trade Union Congress of the Philippines (TUCP).
TUCP is the biggest confederation of labor federations in the Philippines with 1.2 million
members. It was founded on December 14, 1975 by 23 labor federations. Today, the TUCP is the
most representative labor center in the country composed of 30 federations from all sectors and
industries (from agriculture to manufacturing to services and even penetrating the government
sector). On June 28, 2016, 326 union leaders, members and families bellowed a unified cry for
“Kontraktuwalisasyon: Walang Kasiguruhan! Walang Kinabukasan! Pahirap sa
Kabataan at Kababaihan!”
But before we rally our opinions, it is imperative for us to first understand the meaning of
contractors. According to Wikipedia, Contractors are persons or companies that perform work on
a contract basis. These are independent entities that agree to furnish certain number of quantity of
goods, materials, equipment, personnel, and/or services that meet or exceed stated requirements or
specifications, at a mutually agreed upon price and within a specified time frame to another
independent entity.
In the Philippine setting, DOLE Department Order No. 174 s, 2017 defines a
CONTRACTOR: any person or entity engaged in a legitimate contracting or subcontracting
arrangement providing services for a specific job or undertaking farmed out by the principal under
a service agreement.
It is worthy to note that the Department Order and the Executive Order signed by the
President on CY 2018 still allows legal contractualization. The President admits that his executive
order is insufficient to punctuate the issue on Contractualization/ENDO and that Congress
initiative is important.
Moving on, a PART-TIME employee is defined as an employee who works less than fulltime or someone who works less than 40 hours weekly.
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There are various reasons for an individual to take on a temporary job and among those are
the following:
Reasons for Taking a Temporary Job
These days, job seekers have many reasons to take a temporary job:
1. The job sought is usually only available as a temporary or "seasonal" job.
2. A temporary job is preferred by the job seeker.
3. A temporary job is all the job seeker can find in their local job market or field, at the current
Particularly if you have been unemployed for more than six months, a temporary job can be
your best options.
Advantages of Taking a Temporary Job
A temporary job definitely offers some advantages to the job seeker:
The temporary job may be exactly the job the job seeker wants, with a time limit for the
employment commitment.
It provides an income stream while the "real" job search continues. (We called this the
"salary continuation plan" in the past.)
It fills a gap on the resume - a gap in experience needed for the next job or a gap in the
resume's employment history.
It may give the job seeker a chance to "test drive" a job, an employer, or an industry.
The job seeker has an opportunity to start their career migration to a new field.
Sometimes, it opens the door to a permanent job, often referred to as "temp-to-perm."
These jobs give both the employee and the employer an opportunity to see how they work
With luck, a temporary job may provide all of these benefits and more.
Disadvantages of Taking a Temporary Job
Of course, a down-side exists for temporary work:
Temp jobs are, by definition, short term, usually less than a month, often less than a week.
If you want a longer term job without making a full commitment to the employer as a
"permanent" employee, freelancing or contracting can be a better good option.
Many temps report feeling isolated and not well-respected by other employees. I'm sure
this varies by organization and "corporate culture," but it happens.
Most temps are not paid top dollar for what they do, unless they have a skill that is quite
Depending on the agency, you may find that you have fewer benefits (sick days, paid
vacation, for example).
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The site manager and other employees may not be particularly helpful when you are in a
learning mode.
PROs of Hiring Contractors:
POV of the Organization
Hiring Contractors Provides Staffing Flexibility (Contractors can lend an extra hand during
the peak seasons which may be too much for regular staff)
Contractors provide missing expertise
Decreased paper work (Payroll procedure is simplified; taxes shall be the burden of the
Contractors may cost less (No benefits and may be subjected to bidding and canvass)
Lacks loyalty (Workers may come and go)
May not imbibe the company’s culture
Less control to workers (contractors have to autonomy as to how to deal with task
which they were hired for.)
Right of firing is dependent on the contract.
PROs of Hiring Part-time:
POV of the Organization
Staffing Flexibility (May provide for needed skills, expertise and experience during the
time of need even with a fixed budget)
Cost Efficient
Paid on an hourly basis
Expands the pool of potential recruits
Reduce workload of regular employees
Lacking commitment (Part-time workers may be working in other jobs aside from their
work with the principal organization)
Recruitment costs may be higher than taking on a single full-time employee
Time on supervision may increase
Less familiarity with the company and programs which may affect productivity.
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Going back to the issue on contractualization that our country is facing right now,
employers argue that regularizing employees involve high costs and may adversely affect small
and medium sized enterprises. Furthermore, they added that after regularizing employees,
productivity would decline because often regular employees rely on the fact that they are
regularized and are protected by labor laws which make the termination process a bit harder.
Experts rebutted this claim stating that the firing process is easy for as long as it follows due
In sum, profit maximization has been one of the primary reasons of putting up business at
least at the point of view of the owners and shareholders. Thus, finding ways to optimize costs is
an imperative. And for as long as it is allowed in our country, the reliance of employers on
contractors will remain and the same goes with part-time hires for as long as the figures present a
promising bottom line.
By 2025, 75% of the workforce will be composed primarily by Millennials. Moreover,
according to survey conducted Deloitte one out of four millennials say they would leave their
companies for a new job if given the opportunity. Glassdoor site estimates that 60% of all workers
report that perks and benefits are a major factor in considering whether to accept a job. With all
this information, it is safe to say that benefits in general play a huge role regarding the future of
the company knowing that the greatest assets of any business is its people.
FRINGE BENEFITS under Section 33 (B) of the National Internal Revenue Code
“any good, service or other benefit furnished or granted in cash or in kind by an employer
to an individual employee (except rank and file employees) such as, but not limited to, the
Expense account
Vehicle of any kind
Household personnel, such as maid, driver and others
Interest on loan at less than market rate to the extent of the difference between the market
rate and actual rate granted
Membership fees, dues and other expenses borne by the employer for the employee in
social and athlete clubs or other similar organizations
Expenses for foreign travel
Holiday and vacation expenses
Educational assistance to the employee or his dependents; and
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 Life or health insurance and other non-life insurance premiums or similar amounts in
excess of what the law allows”
What are the reasons for offering Fringe Benefits?
80% of employees who like their benefits package also say that they identify strongly with
their company’s vision and values, as opposed to 40% of employees who don’t like their
current benefits package.
Engaged employees will work harder faster and smarter to achieve goals and they do so
because they feel their contributions are valued. According Gallup, businesses with
engaged workforces are 22% more profitable than those staffed with disgruntled workers
American companies alone spend $360 Billion annually in health care cost as a result of
stress and health issues caused by bad bosses
Gym discounts, health care, vision and dental programs
To hold employees, you need to make them feel that you are invested. A Randstand survey
revealed that 55% of employees left their jobs because they found better benefits
Benefits tend to be the determining factor in deciding where to go. Understanding benefits
package of rivals is also important so that you wouldn’t have to spend more than you need
Scholarship, job training and educational assistance
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Businesses that treat their employees well are often recognized for their efforts.
Glassdoor “Best Places to Work”
Bigger Pool of applicants
Portrays an image that the company is doing well.
Managing your employee benefits can be an arduous process. From handling enrollment
and calculating benefit deductions to maintaining compliance, it’s easy to become overwhelmed.
But process doesn’t have to be so complicated! If you’re struggling to stay on top of benefits
management, follow these simplified steps.
1. Analyze your current employee benefits
Examine the benefits you’re currently offering your workforce and look for any
Goal: To give the best benefits for the least amount of money.
*A different health insurance company with the same coverage.
*By only offering the benefits your employees actually need, you’ll save money and reduce
your burden.
2. Align your benefits strategy to your long-term goals
Designing a strong benefits strategy goes beyond knowing your employee and company
budget. You need to align your strategy with your company culture and long-term goals.
3. Customize your benefits plan
When it comes to benefits there’s no one-size-fits-all solution.
58% of employees want customize benefits option.
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Giving your current and future employees what they want show you truly care about them
and helps compete with other companies.
4. Educate your employee
Educate your team on your benefits plan to ensure they’ll get the most out of it. Otherwise,
you’ll be spending money on benefits that nobody is using.
Company Website with info of benefits.
5. Invest in the Right HR Tools
6. Train Your Employees
Business.inquirer.net/229017/will-ending-contractualization-bad business
 Anna Meloto-Wilk May 08, 2017
www.thebalances mb.com/hiring-employees-vs-hiring-contractors-the-pros-and-cons-2948201
Glassdoor Website
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